National Science Foundation

Scientists and engineers picked by the National Science Foundation for a two-month boot camp on entrepreneurship pose at Stanford University on the first day of class in October.

Lab scientists are getting a $50,000 assist from the U.S. government to go to school and learn the entrepreneurial skills required to take their innovations into the marketplace and, perhaps, become millionaires.

"I am basically teaching them how to do eye contact and test their hypotheses outside of the lab," Steve Blank, a startup guru at Stanford University who designed and teaches the course, told me Tuesday.

The course is part of the National Science Foundation's recently launched Innovation Corps (I-Corps) program, which aims to help researchers make the leap to entrepreneurship. The first 21 teams wrapped up the two-month-long course earlier this month.

It is modeled after Blank's Lean LaunchPad class, which replaces the traditional masters in business administration curriculum — balance sheets, business plans, etc. — with what Blank calls "the scientific method for entrepreneurship."

Entrepreneur training
The course forces teams of researchers — an entrepreneur, principal investigator, and mentor — to network with colleagues and potential clients to test hypotheses about the market for their lab innovation.

As hypotheses fail, the teams adapt with what Blank calls a pivot, or change in the business plan. It acknowledges that startups usually go through multiple failures en route to success.

That's different than how a traditionally-trained MBA would operate in an established corporation, notes Blank, where failure would almost certainly result in the firing of an executive.

"This word pivot not only encapsulates the fact that you are going to be changing rapidly, it embraces the fact that we are going to do it without crisis. We are going to do it without firing executives," he said.

For example, a company called Arka Solutions, led by Satish Kandlikar, a mechanical engineer at the Rochester Institute of Technology, pivoted twice throughout the process. 

They started with an idea they would manufacture highly efficient LED lamps, but ended up with a company that uses their technology to make heat-pipe cooling systems for LED lights as well as electronics cooling and HVAC applications.

The next Google?
Before the course started, Blank thought maybe three or four of the teams would end up going forward as companies. After 8 weeks and 1,947 calls, 19 of 21 teams said they are now entrepreneurs.

None of these companies are going to be the next Google or Facebook, well-known Internet companies with eye-popping billion-dollar market valuations, Blank noted. But successful $100 million companies? 

"Absolutely," he said, adding that these teams of scientists and engineers echo the original roots of Silicon Valley, which was founded by a bunch of PhDs, not MBAs.

"The National Science Foundation has started the first incubator for science and engineering from the government," he said.

Armed with his hypothesis-testing methodology to successful entrepreneurship, Blank says the teams involved in I-Corps could attract venture capital away from overly valued Internet companies.

That should come as good news to students who stuck with chemistry, biology and physics as their counterparts chased riches promised by degrees in law or business.

More on I-Corps, innovation and science:

• Corps will turn science into startups
• Gov't picks tech to incubate
• Eight great American discoveries in science
• White House issues scientific integrity memo

The National Science Foundation will be offering the I-Corps at least twice in 2012 and expanding the course to universities around the country. For more information, visit the I-Corps website.  

John Roach is a contributing writer for msnbc.com. To learn more about him, check out his website. For more of our Future of Technology series, watch the featured video below.

IEM / msnbc.com

The red line in this chart shows the dramatic rise in the price of Newt Gingrich shares on the Iowa Electronic Markets' exchange for the 2012 Iowa GOP presidential caucus. "ROF" is "rest of field."

How many stockbrokers can boast about a trade that brought in more than 200 times their investment over the past six weeks? Political pundits could, if they had the foresight to "invest" in GOP presidential hopeful Newt Gingrich's prospects back in October.

The Iowa Electronic Markets make it possible to do such a deal: The IEM operation, sponsored by the University of Iowa's Tippie School of Business as a economic research project, is the only market in the country that has the tacit blessing of the Commodity Futures Trading Commission to let traders lay real money down on political predictions. In other contexts, this might be known as a "bet."

Here's how it works: You can buy up to $500 worth of shares in a political proposition — for example, the proposition that Gingrich will finish either No. 1 or No. 2 in January's Iowa GOP presidential caucus. If the proposition pays off, you'll be paid $1 for each share. If it doesn't, the shares are worthless. Thus, the share price on a given day should reflect the traders' assessment that the prediction will come true.

Researchers have reviewed the IEM's record since the Bush-Dukakis faceoff of 1988 and report that political prediction markets are at least as accurate as traditional political polling. During the 2008 presidential campaign, traders leaned toward a Democratic win more than a year before the actual election. Not much changed in the market after that year's party conventions.

Gingrich, however, has experienced a huge shift in fortunes over the past six weeks, on the political circuit and on the IEM: His Iowa caucus shares were trading at just 0.3 cents on Oct. 13, but on Tuesday they reached 69.1 cents. (Ron Paul has just edged ahead of Mitt Romney as the runner-up.)

"Gingrich is soaring," University of Iowa spokesman Tom Snee told me today. "He's actually gone up from yesterday. Today he's at 75 cents a share."

That means every dollar invested in Gingrich in mid-October would yield $250 today.

Now, before your head starts swimming at the prospect of making tens of thousands of dollars in the political game, here's a reality check: There's a limit to how much you can invest in an IEM proposition, and it's not just the $500 account limit.

"You can only buy something if it's available for sale, and we're not going to have 166,000 shares for sale," Snee said. Right now, there's only about $5,000 total invested in the Iowa caucus market. The entire value of investments in all of the IEM's markets is about $185,000, held by about 1,200 traders. You couldn't possibly have spent the whole $500 buying up Gingrich shares at 0.3 cents per share.

Here's how Iowa professor Joyce Berg, director of the IEM, explained the issue in an email passed along by Snee:

"All IEM contracts in the RCONV [Republican Convention] market are issued by selling bundles (one of each contract in the market) for $1.  Because exactly one of the contracts will pay off, the IEM has exchanged $1 for something that will be worth $1.  In your example, for a trader to spend $500 on contracts selling at $0.003, there would need to be $500/.003 = 166,667 Gingrich contracts available.  The only way that could happen is if other traders had spent $166,667 purchasing bundles. The funds to trade the hypothetical trader’s gains come from other traders.  That is, for every gain, there is an equal loss in the market.

"In other markets where traders can sell short, there are banks that guarantee the trades.  In the IEM, we don’t have that issue due to the way we use bundles to create contacts."

So if you were hoping to use your political acumen to pay for a condo, the IEM can't help you. But there are some potential bargains out there. Heck, just a couple of weeks ago, Herman Cain's Iowa caucus shares were trading at more than 25 cents each. Now they're worth a penny. If you have a hunch that Cain can revive his fortunes, there's money to be made. How's that for an economic plan?

More about prediction markets:

• 2012 political market open for business
• Market lays its bets on Oscars
• Buying into all sorts of predictions
• Flu forecasts come true
• Pentagon kills 'terror futures market'

To handicap the political marketplace, check out NBC Politics on msnbc.com. And to find out what's going on in the financial markets, check in with msnbc.com's Business section.

Connect with the Cosmic Log community by "liking" the log's Facebook page, following @b0yle on Twitter and adding the Cosmic Log page to your Google+ presence. You can also check out "The Case for Pluto," my book about the controversial dwarf planet and the search for new worlds.

Money is not what it used to be. It doesn't seem to go nearly as far, for one thing. Perhaps even more worryingly, credit and debit cards allow what money we do have to be spent without us feeling the immediate consequences. Thankfully, scientists at the MIT Media Lab have created a set of wallets to help us keep our spending in check.

"We make the same swiping motion whether we're buying a cup of coffee or a large-screen TV -- or even worse, automatic transactions go on without our knowledge at all. Our actions are divorced from the consequences," John Kestner, one of the wallets' creators, explained to me in an e-mail.

"So the wallets bring back some of that physical sensation of money, which gives us a more immediate, visceral sense when we're making purchasing decisions, than remembering to check your bank statement each time."

The team has developed three prototypes of the so-called Proverbial Wallets. Each communicates with your bank account via a Bluetooth connection with your cell phone. "There's an app on the phone which does this as securely as any online transaction," Kestner said.

The Bumblebee wallet buzzes through a vibrating motor whenever your bank processes a transaction. This establishes a connection between handing over a credit card for a purchase and your virtual cash. A buzz in your pocket when you're not actually at the register could be a sign of fraud -- or it could mean an automatic deduction is being taken out.

The Mother Bear model helps keep budget-conscious folks on task. A hinge inside makes it harder and harder to open as money gets tighter and tighter.

For those lucky enough to have a puffed up bank account -- and are proud of it -- the Peacock model may be the best option. "The wallet shrinks and swells to reflect the balance in your accounts. Your assets will be on display to attract potential mates," the team explains on its project Web site.

Of course, as with any gadget designed to save us from ourselves, you've got to spend money to save money. When the technology hits store shelves, expect about a $60 ding to your bank account. If that seems like a lot, be thankful that Kestner feels a bit out of touch with his creative side.

"If I were more of an artist," he said, "I'd enjoy the irony of charging a lot for these."

More stories on money and technology:

• Cell phone money transfer service unveiled
• Dwolla a new player in electronic money transfers
• Second Life bank crash foretold financial crisis
• Online game gets real-world banking license

John Roach is a contributing writer for msnbc.com. Connect with the Cosmic Log community by hitting the "like" button on the Cosmic Log Facebook page or following msnbc.com's science editor, Alan Boyle, on Twitter (@b0yle).